BOOM, BLAH, OR BUST?
The Three Economic Futures Still on the Table (And What You Should Do About Each as an investor or business owner)
Yesterday saw an unprecedented single-day eruption in the DOW following optimistic headlines surrounding an evolving U.S. tariff strategy that appears—at least temporarily—to be working as intended. But before we take more than one victory lap, let’s level-set: there are still some unsettling signs in the macro environment. Credit markets feel “broken” to many seasoned investors, and liquidity remains a lingering concern beneath the surface.
So what happens next?
It’s time to lay out the three most plausible economic scenarios—BOOM, BLAH, or BUST—and what retail investors and small business owners should do to prepare for each.
SCENARIO 1: BOOM
The Best-Case, Least-Likely Outcome
What It Looks Like:
Productivity soars thanks to AI and automation.
Inflation falls without sparking a recession.
Oil prices stabilize or trend lower.
Business and consumer confidence rebound.
Why It Could Happen:
Declining energy prices ease inflationary pressure.
AI and tech adoption drive meaningful productivity growth.
Resilient employment data bolsters demand.
Geopolitical tensions de-escalate or plateau.
What To Do:
For Retail Investors:
Lean into growth sectors (tech, small-cap equities).
Add exposure to Bitcoin and speculative upside vehicles.
Rebalance toward risk-on assets as confidence returns.
For Business Owners:
Invest in new product lines and expansion.
Hire proactively to build capacity ahead of demand.
Secure flexible financing while credit is still accessible.
Reality Check:
We’re not there yet. BOOM is the outlier unless multiple variables break the right way—particularly inflation, energy costs, and geopolitics. Hope for the best, but prepare for the worst.
SCENARIO 2: BLAH
Stagflation: The Most Likely Near-Term Outcome
What It Looks Like:
Inflation remains elevated but doesn’t spike.
Economic growth slows or stagnates.
Unemployment ticks up, but not dramatically.
Business margins tighten, and consumer spending softens.
Why It Could Happen:
Oil prices remain volatile or hover near $80–90/barrel.
Persistent wage inflation and tariff-driven cost pressures.
Global trade realignment (U.S.–China, EU fragmentation) continues.
Fed interest rates remain elevated to combat inflation, limiting growth.
What To Do:
For Retail Investors:
Diversify into inflation-resistant assets: TIPS, gold, select REITs.
Stay liquid and limit high-risk leverage.
Consider quality dividend-paying stocks for cash flow.
For Business Owners:
Reassess pricing models and raise rates gradually where possible.
Automate where feasible to lower labor dependency and begin to use AI to improve business process efficiencies.
Lock in vendor contracts and reduce operational bloat.
Position for strategic acquisitions of distressed competitors.
Historical Context:
This mirrors the stagflation of the 1970s—with high energy prices, supply chain shocks, and global realignments contributing to persistent inflation and low growth.
SCENARIO 3: BUST
Credit Crisis: The Worst-Case Scenario
What It Looks Like:
A credit crunch or liquidity event freezes financial markets.
Overleveraged institutions collapse, triggering contagion.
Asset values plunge. The Fed and Treasury must intervene.
Business and consumer spending collapse.
Why It Could Happen:
Prime broker liquidations or failures in private credit markets. (Dressed up sometimes in muted “mergers” between larger financial institutions with all stock-type deals indicating that maybe the firm entanglement was such that the losses on something like the Basis Trade had to be “absorbed” in order to stay solvent via the merger while keeping up optics that all on the surface is well.)
Opacity and leverage in the $2T private credit space cause ripple effects.
Real estate and corporate debt become impaired collateral (a big risk still).
Global central banks face constraints in coordinating bailouts due to geopolitical fragmentation.
What To Do:
For Retail Investors:
Keep ample cash or short-term Treasuries on hand.
Shift exposure toward defensive sectors (healthcare, utilities).
Reduce or eliminate margin use and speculative positions.
For Business Owners:
Strengthen cash flow and delay capital-intensive projects.
Renegotiate debt terms or refinance while markets remain open.
Build contingency plans for a 6–12 month demand freeze.
Maintain optionality and operational agility.
Historical Parallel:
This scenario evokes the 2008 financial crisis, which was triggered by a credit unwind but complicated in 2025 by less centralized control, geopolitical conflict, and modern market opacity.
A Note on Oil Prices and Stagflation Risk
While energy prices are falling, stagflation risk isn’t eliminated. Inflation is now being driven as much by wages, tariffs, and persistent supply frictions as it is by energy costs. Oil below $70–$80/barrel helps reduce headline inflation but won’t cure deeper structural inefficiencies. It appears with the help of the Saudis, we may be able to see $40-$50/barrel or stay well below this threshold in the $60s/barrel, but again, the tariff and free trade deals with 75+ countries and most importantly China are still the variable that needs to fall in place in concert with this for a BOOM to beat us out of BLAH (stagflation).
Conclusion: Be Ready for All Three
The market is sending mixed signals — booming one day and teetering the next. Don’t get lulled into complacency or panic or sucked into the mainstream media’s intoxicating coverage as this is like the Superbowl mixed with a Season Finale of the Real House Wives for investors. Excitement and drama and a bunch of irrational exuberance and fear. The key for investors and business owners alike is adaptability and a sober approach to day-to-day management:
Protect your downside with cash, diversification, and reduced leverage.
Prepare your upside bets with disciplined optimism.
Stay informed and ready to pivot as macro data evolves.
Whether we’re heading for BOOM, BLAH, or BUST remains to be seen, but those who clearly manage risk and act pragmatically and decisively will have the upper hand.
Don’t bet against more wins by the current administration, but remember that despite the rhetoric, it’s not Trump’s job to save your portfolio or business. It is yours and mine. It is a great time to be building or growing your business in America, and we will take the tailwinds all day, every day, but you and I must never give up control of the rudder or take our eye off the compass.
Stay safe out there!
~Chris J Snook
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